GBPJPY charted a red shooting star candle during Monday’s session following the rejection near the topline of the bullish channel and the 144.00 level, justifying the subsequent selling pressure on the price. The downside reversal in the RSI and the softening momentum in the MACD is another alarm signal that the bears may dominate in the short term.
The pair is currently looking for support around the 143.00 number, though a break at this point would not raise concerns among investors unless the decline ruins the upward trend below the 20-day simple moving average (SMA) and the crucial 141.85 barrier. If this is the case, the sell-off may sharpen towards the 50-day SMA and the bottom of the ascending channel, where any violation could boost the odds of a trend reversal.
On the upside, a rally through the 144.00 – 144.55 area and beyond the surface of the channel could activate fresh buying, likely bringing the 145.89 hurdle next under the spotlight.
Summarizing, GBPJPY could face additional weakness in the near term, though only a close below 141.85 would downgrade market sentiment.
